Monday, December 21, 2015

Too many, too few; Too few, too many

1.  Once upon a time, the Goldilocks characters in this parable of the abattoirs called capitalism,  were kept busy telling us how there were too many of us. Too many people.  There were too many people for the Club of Rome; there were too many for spaceship Earth; there were too many for the 'carrying capacity' of this planet; there were just too damn many.  Of us.....although, let's face it, Goldilocks was a white girl, so the real meaning was... 'there's too many of them.'  Too many of those with darker eyes and darker hair and darker skin.  Too many of them.

There's too many of them and not enough oil, water, natural gas, arable land, grain, housing, antibiotics, vaccines, all of the above.  We've hit the peak.  We're past the peak.  We're on the downhill side of the slippery slope of the bell curve.  There's too damn many of them. 

2.  But that was then, and this is now.  Now,  the Wall Street Journal, and the Financial Times feature articles on the "dwindling work force,"  "too few people,"  "labor shortages," the "graying" of (Japan, the EU, the US) and the peril of declining birth rates.  Now, apparently, there are too few of us, us being the young us, and not young as in 'state of mind' young, or 'young at heart,' but actually young.  Really young.  Young in body young.  Young on your driver's license young. Young enough to work for the next 40 or 50 years.

According to the WSJ, there aren't enough young people in ... China.  That's right, 1.4 billion people, and not enough young ones entering the work force to meet the needs of industry.

Because the Goldilocks capitalists are just that-- capitalists-- they explain all things all the time by referring to supply and demand.   "Labor shortage" is a function of supply and demand, supply being the declines in population growth and the reduced numbers of young people participating in the labor force.

Labor shortages explain for Goldilocks why wages have increased in China and why unemployment for those in their 20s is at record levels in Europe.  You see, the increase in wages due to labor shortages in Europe drove wages to the point where production was no longer profitable.  Amazing isn't it that  the increased wealth that the bourgeoisie have awarded to themselves, the stock buy-backs, dividends, special pay-outs,  hasn't made production unprofitable, isn't it?

Labor shortages explain why Goldilocks is in Vietnam, why the Philippines have become so attractive, and why the minimum wage in the US has been so minimum for so long. (see above)

For Goldilocks, labor shortages explain the increase in temporary, and part-time employment.  (see above)

For Goldilocks, labor shortages explain lay-offs.  (see above)

Labor shortages explain overproduction for Goldilocks.  If labor shortages didn't exist there would be more "effective demand" and consequently maritime freight rates wouldn't be below break-even points; oil would be at $100 per barrel; copper would be back to $7000 per ton; and the asset-backed-securities markets would have never imploded.  Raise your right hand and repeat after Goldilocks...

3.  When the Goldilocks bourgeoisie are talking anything, they're talking about profit and right now.  So the problem isn't lack of population growth, it's lack profit growth.  The problem isn't a labor shortage, but the exhaustion, more than less, of the abilities mechanisms, arrangements, relations of extracting increasing amounts of surplus value to translate into growth in the increment of total output, in the rate of value expansion.

Since 2011, the United States, despite holding unit labor costs and overall wage and benefit growth   flat, the growth of the  total value of output per production hour has been, at best, miniscule.

Overproduction is the inability of accumulation to sustain profitability. That bears repeating.

After 2008, China articulated a "shift" in its economy.  The FDI-export model was to be supplanted by development of the domestic market.  Household consumption would replace fixed capital formation as the prime economic driver.

However, no such transformation has occurred. Between 2007 and 2011 the share of real GDP claimed by household consumption declined more than 10 percent.  The share of GDP claimed by gross capital formation increased 25 percent during the same period.

Overproduction is the inability of accumulation to sustain profitability.

China cannot increase the "domestic market," and household consumption,  as long as 40 percent of the population is tethered to the rural economy; agricultural productivity remains low; and the average size of agricultural units is less than 2 hectares.

Productivity requires the expulsion of labor from the land, no less than productivity requires the reduction of labor in the industrial production process.  These simultaneous impulses of capital in both the industrial centers and the rural areas put the truth against the myth that China has a "labor shortage,"  or that increased wages are damaging accumulation.

The Goldilocks East and the Goldilocks West have run up the inside of the walls of the cage of their own making.  Increasing the relative amount of surplus value extracted during the working day is necessary to restore ratios of  profitability so impaired by accumulation.  The means for increasing that relative amount of surplus value is more intensive accumulation that impairs profitability.

Under such conditions, the long-term tendency of the decline in profitability converges with and is manifested in the sudden collapse of the capitalist markets, the inability to sustain a recovery, and the pressing need for liquidation of the capital values embedded in the means of production.  Socialism or barbarism?  That's one way of putting it, a little too philosophical for me.  Let's try "Arson or Revolution."  This time, the three bears better eat Goldilocks.

December 21, 2015

Saturday, December 12, 2015


...even I-- cynical, jaded me-- can't believe what I read.   Like what I read some days ago on Louis Proyect's Marxmail assisted living center chat-room for ex- and current Trotskyists of some sort, so-called socialists, Syriza,  I mean Podemos, I mean Corbyn supporters and the like.  Like this gem from a list participant on December 4: 

Why doesn't the U.S. military bomb the power stations and sanitation systems in Raqqa (the ISIS capital) and make life miserable there? By making life unbearable in the ISIS capital, the civilians would have no choice but to flee, and the terrorists would lose their main selling point: That they can sustain a viable state and orderly rule. The US bombed the heck out of Nazi Germany and Imperial Japan. Why not make life under ISIS a hellish nightmare so people think twice before declaring allegiance to a rubble caliphate? Our answer might be civilian causalities but I don't think that is their reason.
Nice, huh?  Bomb the power stations and sanitation facilities of Raqqa so the population can live in hell, as opposed to now under the caliphate, when they are living oh so comfortably, hell being living in darkness with no sanitation facilities. 

We all know what high military value targets supplies of safe drinking water are, right?  Particularly us Marxists, because material conditions determine consciousness, and nothing says revolution like dysentery, cholera, and typhoid fever.

[Edit]See this-- the 'I wonder why....?'-- is supposed to pass as simple curiosity; never, never should such disinterested questioning be confused with advocacy.  Here's the what passes for logic:  "When imperial powers are really really really opposed to something, they bomb the fuck out of it.  They lay waste to civilian populations.  They discriminate targets in such a way that the results of the attack on those targets are indiscriminate.  If the US, UK, France etc. were really really really opposed to ISIS or whatever manifestation the results of the defeat of social revolution in Syria, or Iraq now assumes, they would rain down fire and brimstone indiscriminately.  Therefore, the US, UK, France etc. are not really really really opposed to ISIS, or Assad. BTW, not that I advocate such a thing... just wonderin'."

[Edit] The road to hell is paved with such speculation......and attacks on sanitation facilities.  This has to be one of the few times that the failure to pursue a policy of war crimes is presented as a criticism of imperial intention; as a sign of vacillation, ambivalence, duplicity. ' You're not sincere enough, you imperialist motherfuckers' is the implicit content of such an "argument."

Well, let's assure our wonderin' Marxmailer that a) they, the US, the UK, France et al aren't done yet not even close  b) you can count on attacks that are indiscriminate in their repercussions increasing if such a thing is even physically possible in Syria, and given the amount of firepower being deployed, it's more than possible.

So if sincerity is your issue, if you're afraid of non-commitment, don't worry, there's a cure for that.

The response to this speculation by a list participant from the list owner, from Mr. Louis Limbo (How Low Can You Go?) Profit  Proyect?  Nothing.  Nada.  Zilch.

From the other participants on Proyect's self-center for assisted living? Musings about the "strategic" value of such bombing?  Sure thing.

Outrage that the ghosts of Robert McNamara and LBJ were speculating on a "Marxist" chat list?  Not so much.  Only one person, an individual of considerable integrity who, back in the day, and in public, identified the former Illinois state's attorney for Cook County, Edward V. Hanrahan,   as a murderer deserving of imprisonment, spoke out and against the suggested "strategy" as a war crime. 

Only that one, who wrote:  
Bombing civilian infrastructure is a war crime. This is why Bush and Cheney should be serving life sentences.
All the others?  All those so busy with projects like the Marxist Internet Archive? No sir.  Or Socialist Action?  No ma'am.  Or various historical projects on Stalinism, fascism, etc. etc.  Nope.  Nada.  Zilch.  Nothing.  Which says everything about who they really are and what they offer the prospects for emancipation.  Nothing.  Zilch.  Nada.

But it gets even better or worse because today, Limbo Louie Louie writes: 
So where is the outcry? When Gaza's water treatment plant was bombed, it became a cause celebre but it barely registers when it is being done by the Russians in the name of fighting terrorism. In both Gaza and Aleppo, you hear the same filthy excuses for state terrorism but it gets different responses. What a fucked up left we have today when people like Patrick Cockburn, Tariq Ali and Slavoj Zizek can shrug their shoulders about Russian mass murder. 

Priceless, no?  Someone suggests that bombing sanitation plants in Raqqa is a measure of sincerity and commitment and Little Limbo Louie Louie shrugs his shoulders.

Russian military forces commit the exact same act,  and it's an outrage.  Because... because why?  Because it registers just how sincere, committed Russia is in defense of its cohort. 

[Edit]But of course, all this, all that, all the crap is the death agony of anti-imperialism.  We have those defending Assad because, after all US imperialism is the main enemy; we have those arguing that freedom fighters in Syria have the "right" to obtain weapons from any source whatsoever, including the US because, after all
a) didn't Lenin say so 
b) didn't Ho Chi Minh accept weapons and supplies from the US in WW2
c)didn't Trotsky say that if Britain invaded Vargas' Brazil, "we" would defend Vargas, because Brazil was a colonized country? 
d)didn't somebody say that if dock workers in Germany or somewhere were leading a general strike during WW1 and the Kaiser was shipping arms to the Irish republicans, the workers should suspend their strike to allow the loading and departure of that ship?

Yes indeed, all those things have been said and all those things are shite:
a) Lenin was wrong
b) Sure thing, and look how well that worked out for the Vietnamese workers in 1945. 
c) Actually Brazil was a colonized area that, for a time, became the seat of an empire; maintained slavery until the end of the 19th century, and if Britain invaded Brazil in the 1930s, the economic determinants of such an invasion were the conditions of international capitalism. "Poor, little Brazil" existed only in the imagination of the 3rd and 4th Internationals.  Effective opposition to such an invasion requires opposition to Brazil functioning in that network of capitalism, to a Vargas.  How do we know?  Look at the war in the Malvinas.  Look at the Paris Commune. Opposition always means opposition to the bourgeoisie  and their agents at home .
d)Wrong again, much more important for the dock workers to maintain the strike against their government, against the war precipitated by capitalism.  How do we know? See (b) above.  Exactly how do you think those weapons are going to wind up being used?  By whom, against whom? what we had in Syria is the stirring of a social revolution precipitated by the breakdown in the mechanisms of accumulation that have raced through the Middle East and Maghreb since 2008.  We have had the massive retaliatory response of the Assad regime, committed to preserving itself, and its control of accumulation.  We have had the disruption of the revolutionary development of the struggle in Syria by this massive retaliation, and into that vacancy, reaction has flooded. 

That anyone thinks Russia on one side, or weapons from the US or any other power can accomplish anything other than what has already been accomplished, decapitation of the revolutionary struggle, is a measure of sincerity all right, the commitment to counterrevolution that informs the left.

Indeed, what a fucked-up left we have today when people like Louis Proyect are not only not shunned, but fit right in.

S. Artesian
December 12, 2015

Saturday, December 05, 2015

Flying Time

I was reminded by a comment from a reader that it has been years since I looked at the US Department of Commerce Annual Survey of Manufacturers. Two whole years?  Imagine that. Time flies when you're in the midst of the weakest, slowest recovery since WW2.   It seems like only yesterday, which come to think of it is pretty close to being an accurate description for review of this data. 

So today, a review, and comparison, of only yesterday, or yesterdays, as the new data set is from 2013:

Column 1-- sector and NAICS class
Column 2-- years
Column 3-- C/h: total value of product divided by production worker hours, in $
Column 4-- c/h: total cost of materials used in production + repairs to buildings, equipment and machinery per production worker hour, in $
Column 5-- v/h: production labor costs--  production worker wages + 30% fringe per production worker hour, in $.  The 30% addition is derived from the ratio total fringe to the total payroll costs
Column 6-- s/h: surplus value-- C minus (c + v) per production worker hour
Column 7-- s/v: ratio of surplus value per hour to production labor cost per hour
Column 8-- s/c+v:  ratio of surplus value per hour to (c +v)

Class          Year       C/h       c/h          v/h         s/h           s/v      s/c+v
Manuf 2011369.85 225.77 28.06 116.02 4.13 0.46
       31-33 2013 371.55 222.62 28.14 120.79 4.29 0.48

Petroleum 2011 5889.97 5101.11 48.31 740.56 15.33 0.14
324 2013 5855.75 5002.81 49.81 803.13 16.12 0.16

Food 2011 327.02 211.71 22.11 93.22 4.22 0.4
311 2013 345.91 225.84 22.43 97.63 4.35 0.39

Machine 2011 294.65 160.34 29.78 104.53 3.51 0.55
333 2013 285.87 149.03 29.54 107.31 3.63 0.6

Transp Eq 2011 416.78 261.92 35.97 119.19 3.31 0.4
336 2013 422.69 258.83 34.51 129.36 3.75 0.44

Computer 2011 445.75 188.89 33.63 223.23 6.64 1
334 2013 428.76 169.04 33.81 225.92 6.68 1.11

Chemical 2011 925.45 506.19 37.16 382.11 10.28 0.7
334 2013 901.04 486.43 37.12 377.49 10.17 0.72

Check the "growth" of  labor costs.  The layoffs, wage reductions, work-rule changes, givebacks have done their job.  Wage and benefit portions of the total product have been reduced even where the total value per hour has declined. The rate of surplus value has increased, even if only modestly, in all sectors save chemical production.

The sector wide declines in total value per hour, C, are the result of deflation in the cost of the materials required for production.  The  increased ratio of surplus value, i.e. the reduction in the time necessary for reproducing the value of the laborer, the wage and fringe,  and the reduction in the cost of materials have combined to boost the rate of production profit.  The offsetting tendencies generated by the earlier decline in the rate of profit itself have generated something that might look like recovery if only...

If only the decline in the cost of inputs into production was not a manifestation of the devaluation of capital; if only the decline in the cost of inputs was not the result of overproduction beyond capital's capacity for accumulation; if only the increase in the relative profit, under the previous two conditions, would not translate, in just one or two tomorrows (like 2015, and 2016) to a decline in the absolute profit, in the mass of profit, which it will, which it must. 

We have come to the point where the offsetting tendencies generated by the decline in the rate of profit have made manifest the chronic tendency of capitalism toward overproduction and devaluation.  

In his Grundrisse, Marx writes:
Sometimes I wonder if even Marx realized how right he was-- capital must confine the giant social forces created within the limits required to maintain the already created value as value.  Yet in these very, and various,  attempts devaluation is the "ultimate" commodity.

S. Artesian
December 5, 2015